Advantage Credit Counseling Service (CCS) is a non-profit organization that has been successfully assisting consumers with their financial problems for over 44 years by providing free expert credit counseling and an excellent debt management program. As a non-profit consumer credit counseling agency incorporated in 1968, Advantage CCS educates clients about wise money management and the responsible use of credit.
We thought it would be great to chat to Lauralynn Schueckler from Advantage CCS for some tips and tricks when it comes to managing money and having a good credit record.
How can we always ensure we keep a good credit record?
There's no magic trick or secret tips that are going to raise your credit score overnight. It takes a lot of hard work, close monitoring, and doing the correct money management techniques every day.
Set up automatic payments for all of your bills. One of the most important things to do is to pay your bills on time, every time. One slip up could cost you some points to your score. Your bill payment history accounts for 35 percent of your overall credit score, so keeping up with your monthly payments is the easiest way to maintain a good credit record and also the easiest way to rebuild credit.
Don't close any old revolving credit accounts, even if you don't use them any longer. Closing accounts could make your credit score drop and credit history is an important factor when determining your score, so having older accounts is actually a good thing.
Lastly, only apply for credit that you really need and will use (pay off the balances each month). Opening several lines of credit or new credit cards will hurt your credit score and you could see a big drop in the number.
What's your recommended debt pay-off method?
Some financial gurus say to pay off the smaller balances first to get instant gratification and reward (debt snowball method). Others say it is best to pay off the high interest rate ones first, regardless of the balances (high interest rate method).
We usually recommend the High Interest Rate Method. The debt snowball method is good because you will see results quickly and know that something is happening, but you will save more money in the end by doing the high interest rate method. It really just depends on the person.
Is there a lot of debt we get into that we could have avoided?
Most debt is unavoidable and even necessary sometimes, like a mortgage loan, student loan, or vehicle loan. If you are not a completely healthy person, then medical debt is probably unavoidable as well. I think the only type of avoidable debt would be credit card debt. If you use credit wisely and manage it correctly, then I truly believe that credit card debt is avoidable. Often times, consumers use credit to replace or supplement income. If you can't afford it, don't buy it. Only use credit when you can pay it off completely or in emergency circumstances. Prioritize your needs over your wants.
How can people pay off their student loans quicker?
Repayment of student loans is critical and crucial to keeping your credit score high and your credit history clean. Student loan debt has surpassed credit card debt in the United States for the first time in history.
This is a shocking statistic, but two-thirds of all college students that graduated in 2011 had student loan debt with an average of $26,600 per person, and that number has definitely increased since then.
Try to pay more than your minimum payment, so more is going to the principal. If possible, avoid consolidating because it lengthens the pay off time. If you're still in school and working, make payments on the loan now. It will save you money in interest.
If you're having problems paying back your student loan debt, talk to your loan service provider and try to work out a deal that you can handle and that you both feel comfortable with. It's not easy to do, but it's something that can't be ignored. Unpaid student loans have a serious negative effect on your credit score, credit history, and overall credit worthiness. Check out more helpful information at this blog post.
How do you encourage not to be overwhelmed about debt etc. and keeping their credit in check?
Advantage CCS is accredited by the Council on Accreditation (COA) and have an A+ rating with the Better Business Bureau BBB. Advantage CCS has been designated a certified comprehensive housing counseling agency by the U.S. Department of Housing and Urban Development (HUD). The agency is also a proud member of the National Foundation for Credit Counseling (NFCC).